Fortescue Invests US$450 Million in Pilbara Generation Project

Fortescue Metals (ASX:FMG,OTCQX:FSUGY) has announced that it will invest US$450 million into the Pilbara Generation project, the next stage of its Pilbara energy connect program.

As quoted in the press release:

The Pilbara Transmission project consists of 275 kilometers of high voltage transmission lines connecting Fortescue’s mine sites, while the Pilbara Generation project will include 150 megawatts (MW) of gas fired generation, together with 150MW of solar photovoltaic (PV) generation. This will be supplemented by large scale battery storage and will be constructed, owned and operated by Fortescue.

Together, the transmission and generation projects, totalling US$700 million, form the Pilbara energy connect program of works providing Fortescue with a hybrid solar gas energy solution that will enable low cost power to be delivered to Iron Bridge. This allows Fortescue to leverage its
existing energy infrastructure including the Fortescue River Gas Pipeline and generation capacity at the Solomon Power Station and support the incorporation of large scale renewable energy.

The Pilbara Energy Connect project builds on the Chichester solar gas hybrid project which was announced last year. This landmark agreement with Alinta Energy will see up to 100 percent of daytime stationary energy requirements of the Chichester Hub iron ore operations powered by
renewable energy. Alinta will build, own and operate the 60MW solar PV generation facility at the Chichester Hub and 60-kilometre transmission line linking the Christmas Creek and Cloudbreak mining operations with Alinta Energy’s Newman gas-fired power station. On completion this will
integrate with the Pilbara energy connect program, via the Pilbara Transmission project.

Elizabeth Gaines, CEO, commented:

Mining is a 24/7 operation and efficient, reliable, competitive energy generation remains an important consideration for the mining sector in Western Australia. The lack of an integrated transmission network in the Pilbara has been a key barrier to entry for large scale renewables and Fortescue’s investment will address this issue.

Fortescue’s commitment of US$700 million in electricity generation and transmission infrastructure will complete the integration of Fortescue’s stationary energy requirements in the Pilbara into an efficient network, while lowering the overall cost of electricity to existing and future sites.

By installing 150MW of solar PV as part of the Pilbara generation project, the modelling indicates we will avoid up to 285,000 tonnes of CO2e per year in emissions, as compared to generating electricity solely from gas. Importantly, Pilbara energy connect allows for large scale renewable
generation such as solar or wind to be connected at any point on the integrated network, positioning Fortescue to readily increase our use of renewable energy in the future.

Click here to read the whole Fortescue Metals (ASX:FMG,OTCQX:FSUGY) press release.